ownership by the Sumas Family Group of shares allowing it to cast more than 50% of the votes eligible to be cast for the election of directors. The Board of Directors has determined that each nonmanagement director is independent as defined by the rules promulgated by the Securities and Exchange Commission (the “SEC”) and the listing standards of NASDAQ.
The Board of Directors held five meetings in fiscal 2021. All directors attended at least 75% of the meetings of the Board of Directors, and meetings of committees of the Board of Directors on which the director served, during the time such director served on the Board of Directors or relevant committee thereof.
The Executive Committee, which consists of Robert Sumas, William Sumas and John P. Sumas, meets on call and is authorized to act on all matters pertaining to corporate policies and overall Company performance.
Board Leadership Structure and Role in Risk Oversight
The Board of Directors reviews its leadership structure in light of the Company’s then current needs, governance trends, and other factors. The Board of Directors reviews and considers whether the positions of Chairman and CEO should be combined or separated as part of an ongoing review of the effectiveness of the Corporation’s governance structure. As a result, the roles of Chairman and CEO have been split from time to time to facilitate leadership transitions, while at other times the roles have been combined.
Effective December 15, 2017, the Board of Directors separated governance responsibilities between the Chairman and CEO roles. The Board of Directors believes that this structure provides an effective balance between strong Company leadership and appropriate safeguards and oversight at this time.
Management is responsible for the day to day management of the risks that the Company faces, while the Board of Directors as a whole and through its committees, has responsibility for the oversight of risk management. The Board of Directors and its committees receive periodic reports from financial, legal and other management members regarding the most significant risks facing the Company. In addition, the Audit Committee assists the Board of Directors in its oversight role by receiving periodic reports regarding the Company’s risk and control environment.
The Compensation Committee
The Compensation Committee, which consists of John P. Sumas, Robert Sumas, John J. Sumas, Steven Crystal and Peter Lavoy, has the primary responsibility for establishing the compensation paid to executive officers of the Company. This includes base salary, bonus awards and supplemental retirement plans. The full Board of Directors reviews and approves restricted share awards and stock option grants. During fiscal 2021, the Compensation Committee met twice. The Compensation Committee does not utilize a charter.
The Audit Committee
The Audit Committee is comprised of three directors, Steven Crystal, Peter Lavoy and Stephen Rooney. Upon completion of Peter Lavoy’s term, the Board of Directors intends to appoint Kevin Begley to the Audit Committee. All current Audit Committee members and Kevin Begley are independent as defined by the listing standards of NASDAQ. The Audit Committee: (1) monitors the integrity of the Company’s financial reporting process and systems of internal controls regarding financial, accounting, regulatory and legal compliance; (2) retains and monitors the independence and performance of the Company’s independent auditors; (3) provides an avenue of communication among the independent auditors, management and the Board of Directors; and (4) approves in advance the services to be provided and the fees paid to the independent registered public accounting firm for all services provided. The Audit Committee operates under a charter adopted by the Board of Directors, which is attached to this Proxy Statement as Appendix A. During fiscal 2021, the Audit Committee met eight times.
The Board of Directors has determined that Stephen Rooney is an “audit committee financial expert” as defined by applicable SEC regulations and that all members of the Audit Committee are able to read and understand financial statements as required by NASDAQ regulations.